What is a mid-cap company?

Mid-cap is the term given to companies with a market cap (capitalization)—or market value—between $2 billion and $10 billion. For companies, some of the appealing features of mid-cap companies are that they are expected to grow and increase profits, market share. and productivity; they are in the middle of their growth curve.

Are mid-cap stocks better than large-caps?

Because mid-cap companies may still be expanding, their stocks could experience bigger gains than large-caps. In fact, since 1994, the S&P MidCap 400 Index has outperformed the S&P 500 (and also the S&P SmallCap 600), according to data from S&P Dow Jones Indices. Risk.

Why are mid-cap stocks useful in portfolio diversification?

Mid-cap stocks are useful in portfolio diversification because they provide a balance of growth and stability. There are two main ways a company can raise capital when it's needed: through debt or equity. Debt must be paid back but can generally be borrowed at a lower rate than equity (due to tax advantages).